How to become a digital nomad – visa tax rules

A digital nomad is someone who works remotely from different locations outside of their home country.

It’s a lifestyle that gives you the chance to travel the world, see amazing places, and learn about different cultures, all while working and earning money.

But how risky is it to become a digital nomad? We take a look at how it all works, from tax implications and travel insurance, to work visas and bank accounts.

A digital nomad lifestyle lets you combine your travels with your career

Become a digital nomad

If you have the ability to work remotely for long periods of time, you may be considering doing so from another country.

The pandemic has led to a work-from-home boom and a survey of 5,000 full-time UK workers by global payments company Wise found that two-thirds dream of living abroad – for reasons such as cheaper living costs and a chance to experience different cultures.

If you’re looking to become a digital nomad, the first step is to work for a company that allows you to work away from an office and supports you if that location is another country.

Various websites list opportunities for the many jobs that can be done remotely. These include:

Another option is to become self-employed or start your own business where you dictate your working hours and location.

Learn more about your flexible working rights.

Can I work overseas if a UK company offers me to work remotely?

Digital nomads can typically do their work online from anywhere, continuing to connect with businesses and audiences in their home country without earning money from local people or local businesses.

Assuming any arrangement will be temporary, it is certainly possible to work overseas if a UK company offers you the option.

You will need prior approval and any agreement should ideally be in writing.

However, you should consider that there may be significant legal and tax implications for you and your employer. Being physically present in another country while performing your work remotely could place you and your employer under the jurisdiction of that country’s employment laws and taxes.

Check local laws and make sure it is possible for you to perform your role legally from your host country. For example, if you work in financial services in the UK, you may be limited by data and compliance regulations.

So yes it is possible, but it will require the authorization of your employer. Spending a few days working overseas probably won’t cause a problem, but any longer there may be a risk of tax and legal consequences.

Work visas for nomads

About 40 countries offer digital nomad visas, including Croatia, Iceland, Portugal, Bahamas, Mexico, and New Zealand. These allow individuals to live and work in the country without having to work for a local employer.

Visas usually last for a year and once in place you can rent property and travel in and out of the country.

To obtain a visa, workers generally must pay a fee, provide proof of remote employment and travel insurance, and earn a minimum amount – to prove they can support themselves.

Paying taxes as a digital nomad

It’s complicated because it depends on your host country. Nomads who stay away for short periods will likely continue to pay taxes as usual in their home country and will not be liable for local taxes.

But some countries, like France, take a stricter approach if you choose to stay indefinitely. Kate Kurdziej, who is based in France and runs IT firm Olivier Consultancy, says UK employees who live in France have to pay French taxes, with you or your employer also paying the relevant social security contributions. “It’s not very easy or often viable to work remotely in France,” she says.

HMRC says that to be a UK tax resident you must have been in the UK for 183 days or more in the tax year. If you are unsure of what taxes you need to pay and need to tell HM Revenue & Customs, see HMRC’s Statutory Residence Test.

Find out how much tax you pay using our income tax calculator.

What about bank accounts?

Ideally, you want a UK bank that offers services worldwide, with limited fees for overseas transactions.

Digital nomads generally recommend Starling, Monzo, Revolut and HSBC.

Will I need travel insurance?

It is always recommended to take out travel insurance, as prevention is better than cure. In fact, some countries require you to show proof of medical insurance upon entering the border.

There are long-term travel insurance policies for people who want to live abroad for a while. Here we explain the advantages of travel insurance in more detail.

Ema Boccagni, director at mobile workforce specialist ECA International, adds that employees should check with their employer to see if they can still be covered by company medical insurance abroad.

What happens to your UK pension?

If you remain resident in the UK, you are entitled to the same pension tax relief and your national insurance contributions will continue to count towards the UK state pension.

Claire Trott, director of wealth management firm St James’s Place, said if you became a non-UK resident, although employer contributions could continue, personal contributions would be limited to £3,600 per year of employment. taxation.

The tax relief disappears after five tax years. From this date you are not entitled to any personal tax relief on payments made into a UK pension scheme.

If you work in the EU, you can count the relevant social security contributions paid in EU countries towards qualifying for a UK state pension.

“It has improved my productivity and my mental health”

Angelique Caracciolo, 32 years old
Angelique Caracciolo has lived in 10 countries in the past year

Angelique Caracciolo, 32, is marketing manager for a UK-based business telephony consultancy.

She joined the company in 2020, originally working from her flat in London. But cramped conditions and a desire to travel prompted her to try working remotely.

His employer, BusinessMobiles.com, has been supportive and Angelique has lived in ten countries over the past year while working remotely. These include Italy, Croatia, Romania, South Africa and Finland.

“Living in so many places has allowed me to continue to build my career while increasing my productivity and improving my mental health. I feel happier, more invested in my daily work and I always have exciting plans for my free time.

“My best advice: pay attention to the time zone of your working hours. Tracking UK working hours is very easy wherever you go in Europe or South Africa. If you decide to go further, you You might have to wake up early or finish late at night. But that’s part of the fun, right?”

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